Managing the Financial Side of Commercial Fleets

Depreciation in Most Segments Improves in July

Used vehicles from the 2011 to 2015 model years depreciated 1.5% in July, a slight improvement over June's 1.7% depreciation rate, reports Black Book.

Trucks retained their relative strength, while passenger cars bounced back from sharper declines in value seen in June. Cars fell 1.9% in value compared to the 2.2% in June and trucks fell 1.2%. The year-over-year depreciation of 15.4% fell toward the lower end of pre-recession levels.

Over the past four Julys, 2016 July depreciation ranked third behind 2013 July (1.3%) and 2015 July (1.4%) but above 2014 July (2.1%).

"Although we saw depreciation trends last month that was consistent with typical seasonal valuation patterns this month, many segments showed slightly better retention heading into the deeper summer months," said Anil Goyal, senior vice president of automotive valuation and analytics. "Depreciation for all segments will likely worsen as fall nears and demand for certain segments continues to dwindle."

Among vehicle segments, full-size crossovers registered the strongest retention with a 0.5% decline to $28,739 (down 9.6% from a year ago). Vehicles in this segment includes the Chevrolet Blazer, Dodge Durango, Ford Bronco, and Toyota Sequoia.

Generally, leases with a fixed term where the lessor assumes certain risks of ownership, notably depreciation and funding, plus takes responsibility for providing certain defined levels of administration.